Petrol price hiked by Rs 7.54

New Delhi: The petrol price was hiked on Wednesday by a record Rs 7.54 per litre as rupee had a free fall, an unpopular decision that was attacked by allies of UPA government who demanded its immediate rollback holding it as unacceptable.

The hike, the third in one year, came a day after end of the Budget session of Parliament and Prime Minister Dr Manmohan Singh speaking of the need to take ‘difficult decisions’ on the third anniversary of UPA-II.

The decision of the oil marketing companies effective Wednesday midnight is the steepest hike in petrol price ever, the previous highest being Rs 5 per litre.

Petrol price in Delhi has been hiked by Rs 7.54 per litre to Rs 73.18 a litre. In Mumbai it will cost Rs 78.57 per litre as against Rs 70.66 a litre. In Kolkata, Rs 77.88 per litre and Chennai Rs 77.53 a litre.

Oil firms had twice raised rates by Rs 5 per litre, on May 15, 2011 and on May 24, 2008.

The hike came under all round attack from political parties but significantly DMK, which is part of the government, sought its rollback.

Finance Minister Pranab Mukherjee maintained that the decision was taken by oil companies as petrol is a deregulated commodity.

The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14.5 per cent and 3.2 per cent fall in value of rupee against the US dollar.

On Tuesday, Oil Minister S Jaipal Reddy had stated that the depreciation in rupee had necessitated an immediate increase in fuel prices.

“If rupee depreciates by one against the US dollar, our oil companies lose Rs 8,000 crore (annually),” Reddy had said on Tuesday. “Rupee yesterday dipped (to an all-time low of) Rs 55 (to a US dollar). Last year it was Rs 46. This translates into a loss of Rs 72,000 crore (on account of rupee depreciation) this year.”

But rates of diesel, kerosene and cooking gas have not been revised as a high-power ministerial panel headed by Finance Minister Pranab Mukherjee and having representatives of key UPA allies like TMC and DMK, hasn’t met for almost a year now.

Price of diesel, kerosene and cooking gas were last raised in June last year.

However, Banerjee said her party would not topple the government like the CPM as it would create economic and political instability in the country.

BJP and other opposition parties including the Left called it ‘unreasonable’ and a big burden on the common and threatened agitation against it.

During 2011-12, petrol prices were revised five times in order to bring domestic prices in line with prices in the international market. Of these, rates were hiked on three occasions and lowered on two other. The last revision in rates on December 1 was a reduction of Rs 0.78 per litre. (PTI)